What You Need To Know About Level 2 Stock Market Quotes
Written By - Elisa Lee
InvestorsHub, Harrisonville MO
Level 2 stock data is the most important tool you can have when buying or selling a stock. The level II stock quotes show the full order book for a given stock. Level 2 stock software tool was originally for institutional traders and brokers but InvestorsHub allows anybody to access tool. It is an electronic replacement for the old open outcry style trading floor.
In the dark ages of stocks and shares, people had to shout to buy stocks like this:
|And they walked up hill both ways, in the snow, to buy the stocks.|
Level 2 stock software replaces this old outcry system. People all over the world can see the buy and sell orders on the computer with InvestorsHub level 2 stock software. Below is a picture of this same outcry scenario. The left column is all the buy orders and the right column is all the sell orders.
The left column represents people trying to buy the stock. The buy column is arranged from highest to lowest price. This is because sellers are interested in the highest bid available. A seller wants to get as much money as possible for the stock. Most important information for sellers should be at the top. Each buy order also shows how many shares a buyer is interested in.
The right column shows people trying to sell this stock. Prices on the right are arranged from lowest to highest. Buyers like to pay as little as possible for a stock. Each row also shows order volume, market maker and the order time. That information isn't available on any level 1 quote page.
How Does Level 2 Stock Quotes Help Me Make Money?
Level 2 can allow you to roughly gauge what the market is trying to do right now. Use this powerful tool to get an idea for the kind of buying support or selling pressure a stock has at various price levels or by individual market makers.
Below is an example of Coca-Cola in the level 2 NYSE. Do you see more buyers on the left or more sellers on the right? There are approximately 10 buyers at 39.43 and only 4 sellers at 39.44. Is this stock more likely to go up or down in the next few minutes? There is no crystal ball to see the future but in this scenario the price is more likely to be going up in the very near future.
The Level 2 stock tool also shows other very useful things when buying or selling a stock. You can see the trades being executed in the bottom right of the tool. The price on the left is green, this means it was a buy order. The buyer agreed to pay the seller's asking price. If lots of trades are executed as buys it is generally a good indicator the stock is going to move up a bit. The chart in the top right is also starting to tick upwards. Three different indicators in the level 2 picture are showing buying support for Coca-Cola. If you are interested in buying then now might be a good time.
What Else Can I Do With Level 2?
The level 2 tool can also help to avoid losing money. You can use the stock tool to look for indicators when a stock is moving lower. If 300 people suddenly decide to sell a stock but only five are trying to buy then the price will probably go down. You will see these sells order appear in the tool. If that sounds like something you would like to know then subscribing to InvestorsHub level 2 might be a good idea.
|Few Buyers||Many Sellers|
|Few buyers versus many sellers.|
Level 2 stock data is not for everybody. Some people don't mind overpaying a bit or not getting maximum value when selling a stock. But if you want to make every little bit count when trading stocks, then level 2 is an essential tool. Don't be a novice and go to war with rubber band guns. Use Level 2 and equip yourself with some advanced technology.
InvestorsHub has level 2 stock data available. Watch all your favorite stocks stream in real time on your computer or mobile device. One free trial is available to all new members. Please contact our customer support to sign up for the free trial. Or view our real-time data products page to see all the level 2 packages available. We are anxiously waiting to hear from you.